The results are in from the holiday season, and Buy Online, Pick Up In-Store, aka BOPIS, is having a positive impact, making it a top priority for retailers to get right in 2020.
Orders using store pickup saw 41% growth on Black Friday and 43% growth on CyberMonday, beating predictions of 39% growth for the season by Adobe Analytics. Given that 82% of consumers told Adobe they planned to pick up extra items in-store when using BOPIS services, the surge means store pickup could be a key contributor to overall retail growth for the season.
These results are somewhat surprising considering that in the run-up to the holidays, shoppers overwhelmingly picked home delivery as the most desired online shopping benefit. Just 8% said they look for BOPIS options, according to McKinsey; because crowds and lines rank in the top three holiday shopping challenges for U.S. consumers, online shoppers were likely hoping to avoid store visits altogether.
So, while the strong growth figures for BOPIS suggest its speed and cost-effectiveness have won out, retailers should be aware that it’s not shoppers’ top choice, and should work harder to win them over in the long term.
As retailers work to keep shoppers interested in BOPIS, they must also watch the potential for it cutting into margin. Same-day store pickup lowers margins by as much as 6.8 points compared with in-store transactions for merchants whose eCommerce systems aren’t optimized for omnichannel commerce, according to the IHL group.
By contrast, stores that are well-equipped to handle O2O (online-to-offline) orders can realize a 3.2-point margin lift on store pickup orders, — and moreover, the degree of complexity for shoppers can drop by 18%, IHL found.
Given the potential to save margin and make the service more appealing to customers, retailers have a strong incentive to get BOPIS right the first time around — or optimize existing implementations to the utmost. To do so, they need:
Buy-in from key stakeholders.
Omnichannel fulfillment is about more than flipping a switch to show store inventory online; it requires buy-in from almost every division in the organization, from warehouse and store operations to merchandising. And promises of swift, seamless service across channels need to be supported with investments across multiple budgets, from IT to marketing. Cross-functional teams should tackle BOPIS projects with an eye to making foundational company changes, whether replatforming to a unified system or eliminating internal silos to speed progress and communication.
One data feed to rule them all.
Successful BOPIS services rely on unifying disparate streams of data, from detailed product information to store inventory to discounting business rules to individual shopper profiles. Before implementation, retailers must source, streamline, and test this information to get to a single version of the truth.
A shopper-centric buying experience.
While revenue objectives drive the decision to implement or invest further in BOPIS, its success or failure ultimately relies on how well the process works for shoppers. Retailers should take into account results from usability testing for mobile and desktop, in-store traffic flows, and customer feedback.
Target’s 2018 investment in store pickup improvements, which focused on speed and convenience for customers, paid off in 5.7% store growth during the holidays, with 60% more items being handled through store fulfillment than the prior year. In addition to providing same-day store pickup, Target added “drive-up” delivery to store parking lots for shoppers who wanted to avoid exiting their cars.
Meaningful measurement and follow-up.
Tracking BOPIS results can be tricky, given the built-in switch from online to store — but retailers should do their best to understand how customers navigate the process and build measurable outcomes into the process before it launches. A holistic approach is crucial; pure website conversions may drop, for example, but store sales preceded by online research may jump.
Retailers should also establish processes for reporting and acting on BOPIS data insights, so that service improvements can be enacted quickly. The team of stakeholders responsible for implementation should remain tasked with follow-through, and should receive regular input from customer service and store teams.
Nordstrom discovered that store pickup orders are the most profitable types of transactions — so the company will add more Nordstrom Local locations, which are pickup depots with services such as gift wrap and alterations available in-house. They will also offer more pickup counters at discount Nordstrom Rack locations.
The 2019 holiday season is turning out to be a breakout year for BOPIS, and online/offline initiatives are only due to grow in importance in 2020 and beyond. With comprehensive planning and follow-through, the right technology, and a customer-centric approach backing responsive omnichannel service during the holidays, brands can win sales and earn year-round loyalty.
Written by JD Kerley, Account Executive at Kibo